Trust is a value. Most people know they have trust when they have a comfort value in something. Companies are much the same way. They know when they have a large degree of trust with their customers, employees and other stakeholders. As social and economic trends continue to be unstable, consumers continue to lose trust in the companies they rely on for products and services.
For companies to build trust in consumers, they need to understand what motivates them to buy from one company over another. Younger generations also have different spending and shopping philosophies than past generations, which means that marketing departments need to adjust their marketing strategies so that they’re targeting the right customers.
According to the 2016 Edelman Trust Barometer, about half of the respondents stated that they had lost trust in businesses because of their lack of contributions to the greater good of their societies. The report also said that 62% of people who favored trusted brands said that they wouldn’t buy from a brand that didn’t meet its societal obligations. In 2017, the Edelman Trust Barometer reported that consumers across the globe continued to mistrust companies. The mistrust spans businesses, governments, NGOs and the media, a breadth of industry that Edelman hasn’t seen since it began tracking trust in 2012.
Edelman states, “To rebuild trust and restore faith in the system, institutions must step outside of their traditional roles and work toward a new, more integrated operating model that puts people — and the addressing of their fears — at the center of everything they do.”
Is There a Connection Between Trust and Performance?
To answer this question, SurveyMonkey sorted the Fortune 100 companies from the highest ranking to the lowest ranking according to the metrics related to trust. Research showed that the top 15 Fortune 100 most trusted companies outperformed the bottom 15 Fortune 100 companies by 26%.
The top 10 most trusted companies in 2018 were:
- Walt Disney Company
- United Parcel Service (UPS)
- Costco Wholesale
- General Electric (GE)
With an upcoming US presidential election that’s bound to be supercharged and talk of impeaching the current president, times haven’t been this politically charged in many years. Today’s consumers expect corporations to take a firm stand on their beliefs and to act on it. Customers are looking at how boards make their decisions and how their sociopolitical influence is taking shape.
These changes are taking place during a time when we have 750 million Millennials across the globe who have expanded their purchasing mindsets. Millennials tend to buy from companies that match their political mindset. However, unlike their parents and grandparents, Millennials aren’t falling away from products that don’t match their mindsets.
Baby Boomers, which are consumers aged 55 and over, hesitate to buy from companies with which they disagree. In 2015, the Global Strategy Group reported in Forbes a breakdown of consumer behavior by age. The report showed that consumers’ spending habits changed based on the company’s agreement or disagreement with their political views. Here’s how it broke down:
|Consumer Ages||More Likely to Purchase Brand They Agree With||Less Likely to Purchase Brand They Disagree With|
A Forbes article states that 56% of Americans believe corporations should be talking about controversial social and political issues.
Political Affiliations Impact Organizations
The many changes in the social and economic landscape are creating the rise of what some are calling a political brand. Masses of today’s customers are more likely to connect systems than generations of the past, and they’re using their knowledge to inform their buying decisions. They’re making connections between controlling water usage and products and how new products impact the supply of raw materials. Today’s consumers are increasingly interested in green products and in energy efficiency. They tend to view companies through an eco-friendly lens.
The concept is that if everyone contributes positively in small ways, ultimately, it has a huge impact overall. Consumers are looking at how companies relate to their political values, their community and the types of causes they support. When they buy a product, they’re buying all that it stands for, and they want to feel good about their decisions.
As an example of a corporate response to environmental concerns, Adidas has expanded its line of products that they’re making from recycled ocean plastic. Adidas partnered with the environmental nonprofit Parley for the Oceans to create products using fibers created from items recovered from the oceans. The project collects plastic nets, bags and bottles and uses them to create shoes and other clothing items and accessories. This project is just one facet of the brand’s greater strategy to eliminate virgin plastic from its supply chain.
Research on child development tells us that our ability to trust begins at the earliest stages of emotional and behavioral development. Trust in shopping habits and in brands continue to develop into adolescence and adulthood, so trust is an important component that companies can’t afford to overlook.
It’s more important than ever before for board directors and other corporate leaders to be on top of industry news that helps them to identify market trends, do sentiment scoring, and identify risks and opportunities. Diligent Corporation’s Governance Intel software helps corporate leaders to stay in the loop because it brings the latest news to them via automated emails, dashboards, curated newsletters, finished reports and other newsworthy items. Users of the software can set up customized parameters for the types of reports and articles they need to read most. The digital tool makes it easy to share business intelligence via laptop, tablet or smartphone. Users can customize their choices by choosing the types of news, sources and modes of consumption, in addition to the volume and frequency they prefer. By maximizing the benefits and potential of this software, corporate leaders will easily be able to stay abreast of how political affiliations impact their organization now and in the future.